IN-APP purchases for children's smartphone games are costing parents around the world nearly $1.5 billion a year.

Mobile games generated $2.7 billion last year with characters, weapons and in-game "extras" accounting for more than half that revenue, according to game-research firm, SuperData.

Welcome to the world of "freemium" apps, where the game may be free but playing it comes with a cost.

Advertising firms have long been accused of targeting children but these new smartphone interfaces that allow users to purchase things instantly are opening up a new manipulation-driven market.

As The Wall Street Journal recently wrote: "Developers are often only one whine away from a sale."

"You've now got the ability to invade the kids' space much more aggressively than ever before,'' research director of the comparative media-studies program at the Massachusetts Institute of Technology, Scot Osterweil, said.

Unfortunately for parents they often don't know how a game works or are too tired to say no.

Kids’ game Tiny Zoo, for example, allows players to purchase different creatures and animals within the game using virtual currency where 100,000 coins cost US$99.99 (AU$95.45).

Companies such as Apple, Google and Amazon make 30 per cent revenue from every sale.

Regulators are now trying to pressure the games industry for more oversight after Apple was sued last year for allegedly allowing children to make unauthorised in-app purchases within games "garnering millions of dollar of ill-gotten gains".

The US Federal Trade Commission said it was considering new ways to improve disclosure requirements for online purchases.

Nonetheless, parents be warned, it's important to know exactly what these so-called apps are costing you.

There is now an option on the iPad and iphone to switch off in-app purchases.

Go to Settings, General, Restrictions and then tap "Enable Restrictions".

One the restrictions have been enabled, scroll down to where it says "in-app purchases" and then tap the button next to it to turn it off.